GERARDS PART OF THE EXAM Flashcards
(26 cards)
What is a company under NZ law?
A separate legal entity registered under the Companies Act 1993.
What does s131 of the Companies Act require of directors?
To act in good faith and in the best interests of the company.
What is reckless trading under s135?
Letting a company carry on business that risks serious loss to creditors.
What does s136 prohibit?
Agreeing to obligations the company can’t reasonably perform.
What is required under s137?
Directors must exercise care, diligence, and skill.
What is a company constitution?
An optional internal rulebook that can modify or override certain rules in the Companies Act.
What are mandatory rules in a constitution?
Rules that apply no matter what (e.g., director duties under the Act).
What are default rules?
Rules that apply unless changed by the constitution.
What are optional rules in a constitution?
Rules a company may choose to include (e.g., how dividends are paid).
What does s174 provide?
A remedy for minority shareholders against oppressive or unfair conduct by the majority.
What is a derivative action (s165–168)?
Legal action taken by a shareholder on behalf of the company.
What does s110 allow?
Shareholders can demand to be bought out after major changes they oppose.
What are pre-emptive rights under s45?
The right of shareholders to buy new shares before they are offered to outsiders.
What does s178 allow shareholders to do?
Access company records like meeting minutes and financials.
What is a partnership?
A business relationship between 2 or more people operating in common with a view to profit.
Does a partnership have separate legal personality?
No, partners are personally liable.
What does ‘joint and several liability’ mean in partnership law?
Each partner is fully liable for the entire debt, not just their share.
How is a partnership formed?
By agreement, conduct, or sharing profits.
Are partners agents of each other?
Yes, they can bind the partnership in contracts made in the course of business.
How can a partnership end?
By agreement, notice, death, or breach.
What is the FMA?
The Financial Markets Authority — NZ’s financial market regulator.
What are the roles of the FMA?
To ensure fair, efficient, and transparent financial markets and enforce financial laws.
What is the FMCA 2013?
The Financial Markets Conduct Act, regulating how capital is raised and protecting investors.
What is the purpose of the FMCA?
To promote confident and informed participation in financial markets.
